The premium charged by wholesale dealers for American Eagle coins from the U.S. Mint may rise from 14%. The mint has said that weekly allocations will be reduced despite very strong demand so far this month.
Gold is slightly higher today but lower this week. Investor sentiment remains extremely bearish but physical buyers continue to accumulate at these low prices. The UK Royal Mint has run out of 2014 British gold sovereigns due to unprecedented demand.
It looks as though the gold market may almost be resetting itself as significant fundamentals are returning to levels seen pre-crisis, suggesting major speculators are moving out of the paper gold market. If this is the case, then physical gold may begin to impact its own price, rather than the paper gold market dominating.
The recent rise in interest rates foreshadows the unavoidable demise for the dollar. Not only did the rise in rates have an immediate effect on the housing recovery, it also indirectly exposed the system to another vulnerability, that is, the Fed is not only the lender of last resort but will be the lender to the spender of last resort.
Gold demand in China, India and the Middle East surged in the 12 months to September while European sales contracted, underscoring a shift in the global bullion market from west to east, according to the World Gold Council.
Data from India shows gold demand failed to pick up over Diwali weekend, a time when gold buying is usually high. Gold retailers in India are referring to this festival as the worst in 20 years in terms of gold demand. However, with every cloud comes, literally, a silver lining.
Gold sales from Australia’s Perth Mint, which refines most of the gold bullion from the world’s second largest producer, rose in October as a drop in prices to a three month low led to increased demand and the mint filled a backlog of orders.
Sales of American Eagle gold coins by the U.S. Mint so far in 2013 have surpassed the total for all of 2012. In 2013, 755,500 ounces of the coins were sold as of last Friday and the end of October, compared with 753,000 ounces in all of 2012.